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Published
Feb 7, 2017
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UK retail sales drop in January amid industry slowdown

Published
Feb 7, 2017

UK retail sales decreased by 0.6% on a like-for-like basis in January 2017, as consumers began to show signs of caution amid rising inflation.



According to the BRC – KPMG Retail Sales Monitor for January, total sales rose by just 0.1%, compared with an increase of 3.3% in January 2016. This is well below the 3-month average of 1.1% and the 12-month average of 0.9%.

Over the three-months to January, non-food retailers experienced a 0.2% decline in like-for-like sales and 0.3% on a total basis. This is also below the 12-month total average growth of 0.8%.

“While this may appear disappointing overall, retailers were up against a strong January last year to try and deliver a repeat performance and many reported an increase in the number of returns received in January,” said BRC chief executive Helen Dickinson.

In the three months to January Brits favoured online shopping over brick-and-mortar stores, sending online sales up 8% versus a 2.2% decline in in-store sales. Despite the growth in online sales, the figure was below the 3-month average of 8.6% and the 12-month average of 9.5%.

Online sales represented 22.9% of total non-food sales in the UK in January, a slight increase from the 21.6% in January last year.

Over the 3-month period, online sales of non-food products grew 8.6% year-over-year.

“Online channels achieved the highest share of total non-food retail spend on record in the three months to January, despite the 8 per cent growth being somewhat below the trend of late. In fact, the rolling twelve-month average growth to January 2017 is the lowest since the monitor began in 2012, falling below double-digits for the first time,” added Helen Dickinson.

“As with total sales, online sales in January were set against a strong comparative period, as January 2016 recorded the highest growth of last year. However, with £1 in every £4 of non-food spending being spent online consistently over the last three months, this provided enough momentum to largely shield online growth from the slowdown of non-food sales overall. It was stores that bore the brunt of the slowdown; posting their deepest three-month decline on record as the demand during retailers’ clearance sales was predominantly online.”

“As the clearance events came to an end, full price items didn’t attract the same demand, echoing a sense of caution from consumers and ultimately resulting in a quiet end to the month for many retailers.”

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